USDA projects massive Russian grain and oilseed exports, while taxes limit growth

Increased acreage and improved yields lead to record production volumes

Russian grain and oilseed shipments have continued to flourish even with the ongoing military conflict in Ukraine, with wheat exports projected to reach a record high this marketing year, according to an International Trade Report from the US Department of Agriculture (USDA).

“Despite the Russian government claims of export challenges, Russia’s grain and oilseed exports have thrived during the current marketing year with ample supplies and competitive prices,” according to the report that was released late Monday, May 8.

Russian grain and oilseed output has surged over the past decade because of increased acreage and improved yields, leading to record wheat, sunflower seed, and rapeseed production in the 2022-23 marketing year.

Grain and oilseed production estimates

The USDA estimates that Russia’s wheat harvest will reach a record 92 million tonnes in 2022-23, up 22% from the prior marketing last year, with winter wheat estimated to total 68 million tonnes, while spring wheat output will come to 24 million tonnes.

The USDA noted that its production estimates are lower than the official Russian projections because they only count wheat harvested in the recognized borders of the Russian Federation and do not include output from Crimea and other Ukrainian regions annexed illegally.

Russian wheat exports are forecast to surge to an all-time high of 45 million mt this marketing year, up 36% from 2021/22, and 3.5 million tonnes higher than the previous record in 2017-18.

Wheat exports by sea have averaged about 3.5 million tonnes this marketing year, with the biggest customers being Turkey, Egypt, Iran, Saudi Arabia, Sudan and Algeria, the USDA said.

Russia has also shipped significant quantities via rail and truck to Kazakhstan and other members of the Eurasian Economic Union.

Russian exports of oilseed products are also higher this year, and with Ukrainian production curtailed because of the war, Russia has expanded production of value-added products such as sunflower oil and sunflower meal for export markets.

The use of export taxes and quotas by the government is the primary reason that Russian agricultural exports haven’t expanded more, according to the USDA.

“While recent Russian government statements have claimed that economic sanctions have hampered Russia’s ability to export, in the case of grains and oilseeds, the Russian government itself has applied export taxes and quotas that affect its prices and export volumes,” according to the report.

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